The Victorian Auditor-General has called into question the Buloke Shire council's "ability to continue as a going concern", while also highlighting issues with the finances of the Central Goldfields Shire council.
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The results of the 2013-14 local government audits identify the Buloke Shire council as being at "high risk of short-term sustainability concerns".
The Auditor-General's report indicates that the council has "insufficient current assets to cover liabilities", and that the council's positive operating result for 2013-14 was reliant on receipt of significant non-recurrent capital grant funding.
It states: "At balance date the council had a poor liquidity position and had used its overdraft facility to meet its short-term commitments associated with flood recovery works.
"The council's poor liquidity position had been exacerbated by its earlier borrowings to meet its defined benefit superannuation obligations.
"The audit opinion on the 2013–14 financial statements continues to emphasise the material uncertainty that may cast doubt over this council's ability to continue as a going concern for financial reporting purposes."
In the longer term, the finances of the Central Goldfields Shire are also facing scrutiny, with its forecast ability to pay its existing liabilities over the subsequent 12 months falling in 2016 and again in 2017.
Despite the forecast, Central Goldfields Shire was identified as having a low risk of financial sustainability concerns.
The report notes the federal government's decision to pause indexation of financial assistance grants, announced in last year's budget, will have a greater impact on shire councils which rely more heavily on grants due to their smaller populations and lower rate revenue.
"These shires will need to monitor, control and constrain expenditure growth if grant revenue is unlikely to increase in the foreseeable future," it states.
Buloke Shire and Central Goldfields Shire councils have been contacted for comment.
The report also suggested the Macedon Ranges Shire council's spending on capital works would not keep pace with its consumption of assets by 2017.
Macedon Ranges Shire Council director of corporate services Glenn Owens said the council’s expenditure on its assets had kept pace with the rate at which the assets were wearing out in the past.
"To ensure that council is able to do this in the future, council has developed its Capital Investment Strategy, which is actually part of council’s long term financial plan," he said.
"The strategy is that council will increase the level of capital renewal spending over the next 10 years by an average of five per cent per annum to ensure that our assets are renewed at the rate at which they are wearing out."